Acknowledgements ThispaperwasauthoredbyArjunaDibley(CentreforPolicyDevelopment(CPD)andStanfordUniversity),SamHurley(CPD)andJoshuaSheppard.

TheauthorsaregratefultoSarahBarker(MinterEllison)forreviewingthelegalcomponentsofthisresearch,andtoProfessorBryanHorrigan(MonashUniversity)andDr.TraversMcLeod(CPD)forprovidingcommentsonearlierdrafts.

This research was developed in part through an internship program supported byMonash University’sFacultyofLaw.ThefindingsinanearlierversionofthispaperwerediscussedaspartofaroundtableheldinOctober2018,co-hostedbyCPD,theOfficeoftheCommissionerforEnvironmentalSustainability,Victoriaand MinterEllison. We are thankful for each of these organisations for their support in hosting theRoundtableevent.Wearealsogratefultothosewhoassistedinthedevelopmentoftheideasinthispaper,includingbyparticipatingintheroundtablediscussion.TheseincludeSarahBarker,Dr.PaulGrimesPSM,ProfessorBryanHorrigan,TerryMoranAC,SamMostyn,Dr.GillianSparkes,Dr.DonRussell,Dr.PeterFrost,Dr. Claire Molinari, Fiona Armstrong, David Atkin, Ron Ben-Davis, Chris Golding, Matt Honey, TerenceJeyaretnam,JackiJohnson,PaulineKennedy,StanKrpan,Dr.JudithLandsberg,RichardLeder,GlennMiller,AntonySprigg,AnnaSkarbek,GregSmithAM,JohnSwieringa,ProfessorJohnThwaites,KathleenTownsendandDanielVoronoff.

Pleasesendanycorrespondenceregardingthepapertoarjuna.dibley@cpd.org.au.

About CPD The Centre for Policy Development (CPD) is an independent, values-driven, and evidence-based policyinstitute.Ourmotivation is anAustralia that embraces the long termnow.CPD’s policy development isgeared towardsanAustralia that isequitable, aspirational, and trulyprosperous–andenlivenedby thechallengeofshapingabetterfuture.CPD’scoremodelisthree-fold:wecreateviableideasfromrigorous,cross-disciplinary researchathomeandabroad.Weconnectexpertsand stakeholders todevelop theseideasintopracticalpolicyproposals.Wethenworktoconvincegovernment,businesses,andcommunitiestoimplementtheseproposals.CPDhasofficesinSydneyandMelbourneandanetworkofexpertsacrossAustralia.Wearenotforprofit:donationstoourResearchFundaretaxdeductible.MoreinformationaboutCPDisavailableathttps://cpd.org.au/.

ThisdiscussionpaperispartofCPD’sSustainableEconomyProgram.Theprincipalfocusonthisprogramisidentifyingideasandpoliciesthatcanhelpbuildafair,sustainableandprosperouseconomythatprovidesa secure future for all Australians. The ongoing work of the Sustainable Economy Program is possiblebecause of contributions fromCPD’s program and organisational donors. CPDwould particularly like tothankMinterEllison,ANZ,MagellanFinancialGroup,SueMathewsandMarkBurford,BrianandDianaSnape,theCurlewFund,theMullumTrust,theHamerFamilyFund,theDiggerandShirleyMartinFund,theFairerFuturesFund,theGarryWhiteFoundation,theWilliamBucklandFoundation,theAustralianEnvironmentalGrantmakers Network, Qantas, the Australian Communities Foundation and the Community and PublicSectorUnionfortheirgeneroussupportforourwork.

CONTENTS

Summary............................................................................................................................................................3

PublicAuthoritiesinAustralia............................................................................................................................4

WhatisaClimateRisk?......................................................................................................................................6

GovernanceofPublicAuthoritiesinAustralia...................................................................................................7

ScopeandNatureofDutyonPublicAuthorityDirectorstoConsiderClimateRisk..........................................9

Scopeofduty......................................................................................................................................................9

Dischargingdirectors’duties............................................................................................................................11

Enforcementforbreachofduty.......................................................................................................................11

Conflictingmandates........................................................................................................................................12

PolicyImplicationsofFailureofPublicAuthoritiestoAccountforClimateRisk.............................................12

PolicyApproachestoEncourageConsiderationofClimateRisk.....................................................................14

Appendix1:DetailedLegalAnalysisofCommonwealthandVictorianPublicAuthorityDirectors’Duties......21

Appendix2:ExamplesofpublicauthoritiesattheCommonwealthlevel.........................................................25

SUMMARY

Keyfindings

• Publicauthoritiesare important institutionsformanagingAustralia’seconomy,andarebothpotentialcontributorstoclimatechangeandsubjecttoclimaterisks.

• Publicauthoritydirectorslikelyhavedutiesofcareanddiligencetoconsiderclimateriskintheiractivities,whichareatleastasstringentasthedutiesofprivatecorporationdirectors(detailedinHutley-Hartford-DavisOpinion).

• Despite impediments toenforcement,public sectordirectorsarenow increasingly likely tobecloselyscrutinised and held to account for climate risk management – especially given rising standardsdemandedofprivatecorporations.

Ourrecommendations

We suggest four policy proposals that could encourage and assist public authority directors to properlydischargetheirduties.

1. Create a whole-of-government toolkit and implementation strategy for considering and managingfinancial risks arising from climate change. This might include specific approaches for training andsupportingdirectorstoaccountforclimateriskindecisionmaking.

2. Useexistingpublicauthorityaccountabilitymechanismstostrengthenmanagementofclimate-relatedfinancial risks. This might include using institutions such as the public sector or public servicecommissionersand/orAuditorsGeneral toreviewtheextenttowhichclimaterisk isaccountedfor indirectors’decisionmaking.

3. Issueformalministerialstatementsofexpectationstoclarifyhowpublicauthoritiesandtheirdirectorsshouldmanageclimate-relatedrisksandpolicypriorities.

4. Consider legislative or regulatory changes to ensure consistent consideration, management anddisclosureofclimateriskbypublicsectordecisionmakers.

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INTRODUCTION

Climatechangeposesasignificantfinancialburdenon–andon-goingriskto–Australia’seconomy.In2018,theSpecialReportonGlobalWarmingof1.5°CwasapprovedbytheIntergovernmentalPanelonClimateChange(IPCC)(theIPCCReport).1WhilemuchofthepublicdiscussionsurroundingthereportinAustraliafocussedontheenvironmentaleffectsofclimatechangeontheGreatBarrierReef,theIPCCReportalsosummarisedexistingevidencewhichshowsthatglobalaggregatedeconomicgrowthwillslowduetoclimatechange, compounding further if temperature increases cannot be limited to 1.5°C above pre-industrialaverages.TherisksthatclimatechangeposetoAustraliathusextendbeyondtheenvironment;theyarealsofinancialinnature.ThesefinancialriskswillacutelyimpactboththeAustralianprivateandpublicsectors.Inthispaper,wediscussonepartofthefinancialriskthatclimatechangeposestothepublicsector.2

OftenwhenAustraliansthinkabouttheroleofthepublicsectorinmanagingclimatechange,theyconsiderthe government as a regulator. They think of the role that the various parliaments of Australia andgovernmentdepartmentsmayplayincreatingandenforcinglawstomotivateormandateother,privateactors to change their behaviour to reduce emissions. However, Commonwealth, state and territorygovernments are themselves important actors within the economy, creating and controlling corporateentitieswhicharesignificantcustomersandconsumers,financiers,insurers,assetownersandstewardsofnaturalresources.3Somepublicauthoritiescontributetothegreenhousegasemissionswhichdriveclimatechange;manyarelikelytobesubjecttofinancialrisksassociatedwithit,nottomentionreputationalandotherrisksshouldtheyfailtotakeappropriateaction.Inthispaper,weconsidertheobligationsofdirectorsofstate-ownedandmanagedcorporateentitiestoaccountforclimaterisks.Wedetailwhatthescopeandnatureof theseduties are, how theymightbeenforcedandwhy this is an important financial risk andgovernanceissueforAustralia.

Public Authorities in Australia PublicauthoritiesplayanimportantroleinAustralia’seconomyanditssystemofpublicassetandnaturalresource governance. According to the Australian Bureau of Statistics, at the end of 2017 there wereapproximately 400 public sector businesses run as commercial enterprises across the country,where agovernmentisthecontrollingshareholder.4However,therearemanymorepublicauthoritieswhichmaynotbe run forcommercialpurposes.5Whilenotnumerous relative to the totalnumberofallAustraliancorporateentities,thesepublicinstitutionsownandmanagesignificanttractsofland,naturalresourcesandassets from roads, air and sea ports, dams, forests, water reservoirs and housing stock, which are allimportanttosustainingandgrowingAustralia’seconomy. (Appendix2providessomeexamplesof theseentitiesataCommonwealthlevel,highlightingtheirdiversityandreach).

1IPCC,SpecialReportonGlobalWarmingof1.5°C(October2018)<http://www.ipcc.ch/report/sr15/>.2Thereareanumberofopportunitieswhichwillfollowifthegovernmentandprivateandpublicfirmsproactivelymanageclimaterisksandtransitions.Thesemayincludefinancialopportunitieswhichwillarisefromnewenvironmentalorothermarkets.Whileweacknowledgesuchopportunities,inthispaperwefocusontherisksideofthisissue.3Recently,economistMarianaMazzucatohasarguedthatinassessingpublicvalueinaneconomy,itisimportanttoaccountfortheroleofpublicinstitutionsaseconomicactorsandnotjustasregulators.Seee.g.,MarianaMazzucato,TheValueofEverything:MakingandTakingintheGlobalEconomy(AllenLane,2018).4AustralianBureauofStatistics,CountsofAustralianBusinesses,includingEntriesandExits,Jun2013toJun2017(CatalogueNo8165.0,20February2018)<http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/8165.0Main+Features1Jun%202013%20to%20Jun%202017?OpenDocument>.5InVictoriaalone,forinstance,therearearound200publicauthorityboards,whichincludeauthoritiesthatmanagenaturalresources,schoolsandotherassets:VictorianPublicSectorCommission,StateofthePublicSector2016–-2017(March2018),chapter5<https://vpsc.vic.gov.au/wp-content/uploads/2018/02/State-of-the-Public-Sector-In-Victoria-2016-2017-Final-Web-version-ISSN-2204-9096.pdf>.

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Importantly,publicauthoritiesareengagedinsubstantialpursuitswhichcontributetoorwillbeaffectedbyclimatechange.Amongotherthings,theseentities:• Ownorfinanceassetswhichcontributetothegreenhouseeffect.Forexample,thereareanumberof

government owned andmanaged superannuation funds, such as QSuper and the CommonwealthSuperannuation Corporation, which are established by statute and include portfolios which holdequities inmajor domestic and international fossil-fuel intensive industries. There are other publicauthoritieswhichholdgreenhousegascontributingassets,butfundsareparticularlyimportantgiventheiroften-largesize.6

• Ownandmanageassetswhichwillbe impactedbyclimatechange. Forexample,DefenceHousingAustralia, which is a Commonwealth government business enterprise, is one of Australia's largestresidentialpropertymanagers inthecountry,holdingandmanagingaportfolioofassetsacrossthecountry.Thisportfolio likely includesareaswhichwillbesubjectto increasedflooding,droughtandstormdamage.

• Makesubstantialprocurementdecisionsinsectorsthatwillbeheavilyimpactedbyclimatechange.For

instance, the Victorian Rail Track Corporation (which trades as ‘VicTrack’), makes procurementdecisions to redevelop and build new rail infrastructure in the state. These decisions could haveimplicationsfortheresilienceofrailinfrastructuretoclimateeffectsandmayhaveimplicationsfortheemissionsintensityofrailtransport.Additionally,NBNCoLimited,aCommonwealthcompanydesignedto deliver a wholesale broadband network to the country, will make decisions about cableinfrastructureanddatacentres–forinstance–whichmaybeimpactedbyclimate-inducedchangestoaveragetemperatureandweatherpatterns.

• Managenaturalresources,suchaswater,marineandterrestrialparksandotherareas,whichmayboth

contributeto,andbeimpactedby,climatechange.EntitiessuchastheVictorianwatercorporations(e.g. Yarra Valley Water Corporation) and the alpine boards (e.g. Mount Hotham Alpine ResortManagement Board) play a role inmanaging critical infrastructure and/or assets, such aswater oralpinereserves.Theclimateimpactsontheassetsthattheycontrolaresignificant.Climatechangeislikelytoaffecttheavailabilityoftheseassets–forexamplethroughdrought–ortheiraccessibility.Thiswillnecessitatechangesinhowtheyaremanaged.Forinstance,alpineareaswillreceivelesssnowfallovertimeandthustheeconomicactivitygeneratedfromtheseareasmayneedtotransition.

• Investinresearchanddevelopmentwhichcouldcontributetoorhelpallayclimatechangeimpacts.Forexample,theCommonwealth’sCottonResearchandDevelopmentCorporationinvestsinresearchand development for cotton growers. This and other industries will likely be impacted by climaticvariability, and thus research and development spending should be aligned to account for thoseimpacts.

• Haveresponsibilityforcommunitysafetyandemergencyservices,arolewhichwillbeexacerbatedbyclimatechange.

6ThisisexemplifiedbytherecentlawsuitfiledagainstasuperannuationfundinAustraliain2018.SeeMichaelSlezak,‘SuperfundRESTsuedfornothavingaplanforclimatechange’,ABCNews(online,25June2018)<https://www.abc.net.au/news/2018-07-25/super-fund-rest-sued-for-not-doing-enough-on-climate-change/10029744>.

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WhatisaClimateRisk? Giventherolethatpublicauthoritieshaveinactivitieswhichareconnectedtoclimatechange,itisimportanttounderstandtheextenttowhichtheseentitiesare legallycompelledtoproperlyconsiderandmanage‘climaterisk’.By‘climaterisk’,wearereferringtoboth:physicalrisksassociatedwithrisingglobalaveragetemperatures,suchasthosedescribedearlier;andtransitionrisksassociatedwithdevelopmentsthatmay(ormaynot)occurintheprocessofadjustingtowardsalower-carboneconomy.Theseriskscouldeachgiverisetorelatedrisksforacorporation,suchastheriskoflitigationfordamagesarisingasafailureofthatcorporationtoaccountforclimatechangeanditsimpacts.7The obligation of decision-makers in private corporations to consider climate risks has attractedconsiderablescrutiny inrecentyears. In2016,a legalopinionbyNoelHutleySCandSebastianHartford-DaviscommissionedbyCPD(theHutley-Hartford-DavisOpinion)foundthatcompanyboardsanddirectorsshouldconsiderclimaterisksinordertosatisfytheirdutyofduecareanddiligenceundersection180oftheCorporationsAct2001(Cth)(theCorporationsAct).8TheinstructingsolicitorfortheHutley-Hartford-DavisOpinion,MinterEllisonSpecialCounselSarahBarker,summariseditsconclusionsasfollows:• ‘climatechangerisks'represent,orarecapableofrepresenting,risksofharmtotheinterestsof,and

opportunitiesfor,Australiancompaniesandtheirbusinessmodels,whichwouldberegardedbyaCourt

asbeingforeseeableatthepresenttime;

• suchrisksarerelevanttoadirector'sdutyofduecareanddiligence,anddirectorscan,andinmany

casesshould,beconsideringtheimpactsontheirbusiness;

• conversely, the law does not prohibit directors from taking climate change and related economic,

environmentalandsocialsustainabilityrisksintoaccountwherethoserisksare,ormaybe,materialto

thecompany'sinterests;and,critically

• itisconceivablethatdirectorswhofailtoconsidertheimpactsofclimatechangeriskfortheirbusiness,

now,couldbefoundliableforbreachingtheirstatutorydutyofduecareanddiligencegoingforwards.9

Australia'scorporateregulator,theAustralianSecuritiesandInvestmentsCommission(ASIC),hasindicatedthat these findings are consistentwith itsunderstandingof the legalpositionunderAustralian law, andreiteratedtheneedfordirectorstotakea“probativeandproactiveapproach”todecisionmakingonclimaterisks.10Inthesectionsthatfollowinthispaper,weevaluatetheextenttowhichthedutiesofdirectorsofpublicauthoritiesaccordwiththoseofprivatecorporationsinrelationtoclimate-relatedrisk.

7StephanieVenutiandMartijnWilder,‘ObligationsonAustralianCompaniestoAddressClimateChange’(2018)92AustralianLawJournal789<https://www-westlaw-com-au.ezp.lib.unimelb.edu.au/maf/wlau/app/document?docguid=I6e6516d4d90611e8b978b52e7aea20ea&tocDs=AUNZ_AU_JOURNALS_TOC&isTocNav=true&startChunk=1&endChunk=1t>.8CPDandFutureBusinessCouncil,ClimateChangeandDirectors’Duties–MemorandumofOpinion(7October2016)<https://cpd.org.au/wp-content/uploads/2016/10/Legal-Opinion-on-Climate-Change-and-Directors-Duties.pdf>.9SarahBarker,ClimateChange&Directors’Duties–LegalOpinion(19December2016)<https://aicd.companydirectors.com.au/advocacy/governance-leadership-centre/external-environment/climate-change-and-directors-duties>.10JohnPrice,‘ClimateChange’(KeynoteaddressatCentreforPolicyDevelopment:FinancingaSustainableEconomy,Sydney,18June2018),<https://asic.gov.au/about-asic/news-centre/speeches/climate-change/>.

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Governance of Public Authorities in Australia Commonwealth,stateandterritorylawseachdefinepublicauthoritiesdifferently.Forthepurposesofthispaper, we are referring to corporate entities which are owned (wholly or partially) by an Australiangovernment and/or established under statute. For instance, this would include a company such asAirservices Australia which is a wholly government owned corporation which is responsible for variousaspects of Australia’s airspace and airportmanagement and service provision. Airservices Australia, likeotherstate-ownedcorporateentities,isestablishedbystatuteandhasamanagementteamwhichreportstoaboardofdirectors.Forthepurposesofthispaper,wehaveexcludedconsideringthelegalpositionofactorsinnon-corporateentities,suchasgovernmentdepartmentsandotherstate-runinstitutionswhichdonothavegovernancestructureslikecorporations.Whilewearenotconsideringthelegalobligationsthatofficials in these entitiesmayhold, thediscussion about public authority directors’ duties is relevant todepartmental officials where, for example, they have portfolio oversight of other incorporated publicauthorities. Additionally, this paper’s findings are relevant to officials who advise ministers on theirobligationsandresponsibilitieswithrespecttothesepublicauthorities.Atabroaderlevel,thediscussionisalso relevant to thewider duties and responsibilities ofdepartmental secretaries tomanage assets andresourcesinanethicalandefficientmanner.Althoughsimilarlystructuredtoprivatecorporations,publicauthoritiesaresubjecttoamorecomplexsetofgovernancearrangements.Publicauthoritiesandtheirboardsareoftenestablishedunderstatuteandarefinancedinpartorinwholethroughpublicmoney,andthustheyaresubjecttoasuiteofregulatoryregimes and other obligations. In addition to their own founding statutes, these organisations are alsosubjecttopublicsectorgovernancestatutes,suchastheCommonwealth’sPublicGovernance,Performance

and Accountability Act 2013 (PGPA Act) or Victoria’s Public Administration Act 2004 (PA Act), otherregulatoryinstruments,andnon-regulatoryministerialoversight.Forinstance,insomesectorsandinsomejurisdictions,directorsmayhavetoalsoconsiderthetermsofministerialstatementsofobligationwhichoutlineoverarchingministerialprioritiesforaportfolioareainwhichapublicauthoritysits.UndertheWater

IndustryAct1994(Vic)forinstance,thecurrentVictorianMinisterforWaterhaspublishedanumberofsuchobligations, includingonemission reductions.11TheNorthernAustralia InfrastructureFacilitycasestudy,discussed on the next page, outlines how different layers of regulation interact in relation to oneCommonwealthpublicauthoritywhichhasbeencloselyscrutinisedforitsapproachtoclimaterisk.Thetotalregulatoryenvironmentapplicabletoeachpublicentityanditsboardwillthereforebetheunique,complex sum of all the obligations under their founding statutes, legislation applying to public sectorauthorities(includinggeneralpublicadministrationlawssuchasthePGPAAct)andotherlaws.Thus,theobligationsunderActssuchasthePGPAActorthePAActforma‘lowestcommondenominator';athresholdlevelofobligationtowhichadditionalspecificlegislationwilladd,ratherthandetract.Insomecases,thisregulatoryenvironmentalreadyincludesarequirementtoaccountfortheimpactofclimatechange.Forexample,section1A(a)(I)oftheAlpineResorts(Management)Act1997(Vic),compelstheMountHothamAlpineResortManagementBoardtoconsiderclimatechangeinitsdecisionmaking.Therefore,inthenextsectionweconsiderthescopeoftheminimumdutiescreatedbythePGPAActandPAActfordirectorsofpublicauthoritiestoconsiderclimaterisk.

11MinisterforWater(Victoria),StatementofObligations(EmissionReduction)(14March2018)<https://www.water.vic.gov.au/__data/assets/pdf_file/0017/120671/Statement-of-Obligations-Emission-Reduction.pdf>.

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PublicAuthorityGovernanceCaseStudy:NorthernAustraliaInfrastructureFacility(NAIF) TheNorthernAustralia InfrastructureFacility (NAIF)wasestablished in2016 toprovide concessional finance to

privateinvestorsinprojectsinNorthernAustralia.ItwasestablishedundertheprovisionsoftheNorthernAustralian

Infrastructure Facility Act 2016 (Cth) (the NAIF Act), and is regulated under the PGPA Act, which sets outrequirementsinrelationtocorporategovernance,reportingandaccountability,whichareadditionaltothosefound

within the NAIF Act. Ministerial responsibility for the NAIF lies with the Minister for Resources and Northern

Australia,whoappointsboardmembersandissuestheNAIFInvestmentMandate.TheNAIFBoardisresponsiblefor

deciding,withinthescopeoftheInvestmentMandate,thestrategiesandpoliciestobefollowedbytheNAIF.The

Board alsomust consider these strategies and polices in away that ensures the proper, efficient and effective

performanceoftheNAIF’sfunctions.

In2016,multinationalconglomerateAdaniappliedfora$1billionloanundertheNAIFtofinanceconstructionofa

raillineassociatedwithanewcoalminingprojectinNorthQueensland’sGalileeBasin.InthewakeoftheHutley-

Hartford-DavisOpinion,theextenttowhichtheNAIF’sdirectorswerelegallyrequiredtoconsiderclimate-related

financial risks associated with the proposed investment became the subject considerable scrutiny and media

interest.Criticsoftheproposalnotedthelargerisksassociatedwiththeproject,highlightinglong-termscenariosby

theInternationalEnergyAgencywhichraiseseveredoubtsabouttheeconomicandenvironmentalviabilityoflarge

greenfieldcoalprojectsoperatingoverthenextseveraldecades.

InApril2016,alegalopinioncommissionedbytheAustralianConservationFoundationconcludedthat,inviewof

theserisks,anydecisionbyNAIFdirectorstoextendfinancetotherailprojectwouldrepresentabreachoftheirduty

ofduecareanddiligenceunderthePGPAAct.12ThesefindingsdrewontheanalysisintheHutley-Hartford-DavisOpinionandonsubsequentstatementsbyAPRAExecutiveBoardMemberGeoffSummerhayesontheforeseeability

andmaterialityofclimate-relatedrisksforfinancialinstitutions.13In2017theQueenslandGovernmentsaiditwould

vetoanyNAIFdecisiontofinancetheproposedrailline.Adanicontinuestoexplorealternativesforadvancingthe

project.

NAIF’sJune2018EnvironmentandSocialReviewofTransactionsPolicy,nowincludesdetailsabouthowthefacility

willassess“climaterelatedESGrisks”.Thisincludesconsideringclimaterisks“relatedtophysical,transitionaland

liabilityimpacts”,andtheextenttowhichtheseriskswillimpacttheabilityofaproposedprojecttosatisfytheNAIFActandInvestmentMandaterequirements.14

12LetterfromDavidBarnden(EnvironmentalJusticeAustralia)toSharonWarburtonandLaurieWalker(NAIF),11April2017,<https://d3n8a8pro7vhmx.cloudfront.net/auscon/pages/1873/attachments/original/1494464732/170411_EJA_ltr_to_NAIF_%28climate_risk%29.pdf?1494464732>.Wedonotofferanycommentonthelegalconclusionsdrawnintheletter,nordowesuggestthatthesubsequentQueenslandGovernmentvetowasduetothisopinion.Rather,wearehighlightingthisasthetypeoflegalandactivistactionwhichmayarisefromafailuretoconsideroraccountforclimateriskissues.13GeoffSummerhayes,‘Australia'snewhorizon:Climatechangechallengesandprudentialrisk’(SpeechatInsuranceCouncilofAustraliaAnnualForum,Sydney,17February2017)<https://www.apra.gov.au/media-centre/speeches/australias-new-horizon-climate-change-challenges-and-prudential-risk>.14NAIF,EnvironmentalandSocialReviewofTransactionsPolicy(June2018)<https://naif-gov-au.industry.slicedtech.com.au/wp-content/uploads/2018/06/NAIF-ESR-Policy-FINAL.pdf>.

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Scope and Nature of Duty on Public Authority Directors to Consider Climate Risk Inthissectionweconsiderwhether,subjecttotheestablishinglegislationandtoministerialdirectionsthatmayapplytoapublicauthority,directorsofpublicauthoritiesinAustraliaoweadutyofcarewhichisatleastasstringentasthatwhichexistsforprivatecorporations.Aswediscussedearlier,thelawgoverningpublic authorities differs between jurisdictions. Consequently, the scope and nature of public authorityduties will depend on whether the entity is constituted by the Commonwealth or a state or territorygovernment.InthispaperweonlyconsiderthescopeofthedutythatappliesattheCommonwealthandVictorianlevel,underthePGPAActandPAActrespectively.15ForfurtherdetailsseeAppendix1.ScopeofdutyBoththeCommonwealthandVictorianlegislationonpublicadministrationoutlinethestandardbywhichdirectorsofpublicauthoritiesmustexercisetheirduties.UnderthePGPAActthisissetoutatsection25(1)(emphasisadded):

AnofficialofaCommonwealthentitymustexercisehisorherpowers,performhisorherfunctionsand

dischargehis or her dutieswith thedegreeof careanddiligence thata reasonablepersonwouldexerciseiftheperson:

(a) wereanofficialofaCommonwealthentity in theCommonwealthentity’scircumstances;and

(b) occupied the position held by, and had the same responsibilitieswithin the Commonwealth

entityas,theofficial.

Usingaslightlybroaderformulation,section79(1)oftheVictorianPAActstates(emphasisadded):

Adirectorofapublicentitymustatalltimesintheexerciseofthefunctionsofhisorherofficeact-(a) honestly;and(b) ingoodfaithinthebestinterestsofthepublicentity;and(c) withintegrity;and

(d) inafinanciallyresponsiblemanner;and

(e) with a reasonable degree of care, diligence and skill; and in compliance with the Act or

subordinateinstrumentorotherdocumentunderwhichthepublicentityisestablished.

Underboth formulations,directorsareaskedtoactwith ‘careanddiligence’aswouldbeexpectedofareasonablepersonorareasonablepersonactingintheirrole.Whilstthecontentofthepublicentitydutieswillbe informed,particularisedandsupplementedbytheentity'sconstituting legislation(amongstotherobligations),atagenerallevelthecontentoftheobligationunderthePGPAActandPAActaresubstantively

15ItispossiblethatsomepublicauthoritiesmayalsobecapturedbythetermsoftheCorporationsAct.Part2DoftheCorporationsActexcludesfromitsambitcertain'exemptpublicauthorities'(definedinsections9and57AofthatAct).Totheextentthat'publicentities'withinthemeaningofthePAActand'Commonwealthentities'withinthemeaningofthePGPAActarealso'exemptpublicauthorities'withinthemeaningoftheCorporationsAct,theCorporationsActwillnotapply.Inothercases,theCorporationsActwillapplytothosepublicauthorities.Regardless,directorsof'publicentities'withinthemeaningofthePAActand'Commonwealthentities'withinthemeaningofthePGPAActaresubjecttocoredutiesundereachofthoselegislativeregimes.Itisthedutiesunderthosetwoactswhichweoutlineinthissection.

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comparable to that of private sector corporations under section 180(1) of the Corporations Act (ouremphasisadded):16

Adirectororotherofficerofacorporationmustexercisetheirpowersanddischargetheir

dutieswiththedegreeofcareanddiligencethatareasonablepersonwouldexerciseifthey:

(a) wereadirectororofficerofacorporationinthecorporation’scircumstances

(b) occupied theofficeheldby,andhad thesameresponsibilitieswithin thecorporationas the

directorinquestion.

Asinrelationtoprivatecorporations,directorsofpublicauthoritieswillbeduty-boundtoexerciseduecareanddiligenceinrelationtoforeseeablerisks.AstheHutley-Hartford-DavisOpinionhassetoutinrelationtotheCorporationsActgiventheincreasingaccuracyofpredictionmodelsoftheimpactofclimatechangetohumansocieties,thephysicalandeconomictransitionrisksassociatedwithclimatechangearereasonablyforeseeabletodayandthuswouldfallwithinthescopeofthedirectors’dutyofcareanddiligence.Infact,theduecareanddiligenceobligationscontemplatedundertheHutley-Hartford-DavisOpinionmayapplytodirectorsofpublicentitiesmorestringentlythantodirectorsofprivatecorporations.Amongotherreasons,thisisdueto:

• TheoverlayofasetofpublicsectorvaluesunderthePAActandPGPAAct,whichoutlinethebroadvalues underwhich public entity decisionmaking should occur. These values suggest that publicentitieshaveagreaterobligationtoproactivelyconsiderand,asrelevant,manageclimaterisk.Forinstance,theCodeofConductforDirectorsofVictorianPublicEntities2016,towhichVictorianpublicentitydirectorsarebound,includesthepublicsectorvaluesoutlinedinsection7ofthePAAct.Onesuch value is for public officials in Victoria to demonstrate “responsiveness” by “identifying andpromotingbestpractice”.Aswediscusslater,therearenowseveralwell-usedandfreelyavailableframeworksforconsideringandmanagingclimaterisk,andtheuseofsuchtoolsmayindeedbeseenasabest-practiceapproach.Section15ofthePGPAActincludesasimilarsetofpublicsectorvalues.

• Thepublicorientationofthepublicauthority'sobjectivesandfunctions,assetoutinitsconstitutinglegislation. Depending on the nature of these objects and functions, they could imply a strongerobligation on the authority to account for future climate risk to bettermanage public or privateresources.Thismaybeparticularlyrelevant inrelationtodecisionsthatthepublicauthoritymustmakeregardingapprovalsor licencing,wheretheauthorityhassomeresponsibilitytoaccountforlongtermriskissueslikeclimatechange.Forinstance,atthetimeofwritingthispaper,thereisanongoingcontroversyaboutwhethertheMurray-DarlingBasinAuthoritytookaccountofclimaterisktothefullextentrequiredunderitsfoundingstatute.17Regardlessoftheoutcomeofthiscontroversy,

16Theauthoritiestendtoconflatetheconceptsof'careanddiligence'with'careandskill'–seeforexampleTrilogyFundsManagementLtdvSullivan(No2)[2015]FCA1452andMacksvViscariello[2017]SASCFC172at[383].Accordingly,itisunlikelythatthecourtswouldfindthatthesubstanceoftheobligationsismateriallydifferent.

17TheMurrayDarlingRoyalCommissionReportnotedthatwithrespecttoclimateriskthe“seniormanagementandtheBoardoftheMDBA…wasnegligent…and[thatthis]mark[s]ashortcominginreasonablecare,skillanddiligence”(268-9).Murray-DarlingBasinRoyalCommissionReport(Report,2019)<https://www.mdbrc.sa.gov.au/sites/default/files/murray-darling-basin-royal-commission-report.pdf?v=1548898371>.Ontheotherhand,theMurray-DarlingBasinAuthoritypressreleaseof31January2019statesthatitis“confidentthattheBasinPlanhasbeenmadelawfullyandisbasedonbestavailablescience”and“rejectsanyassertionbytheCommissionthatithasactedimproperlyorunlawfullyinanyway.”<https://www.mdba.gov.au/media/mr/mdba-response-south-australian-royal-commission-final-report>.CPDmakesnocommentregardingtheselegalpositions.

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thisexamplehighlightsthelevelofscrutinythatpublicauthoritiesnowfacefortheirmanagementofclimaterisk.

• The nature of the public authorities’ activities and the magnitude of physical and/or economic

transition risks associatedwith climate change to those activities. Aswe discussed earlier, publicauthorities have several connections both to the causes of climate change, and they may beparticularlyaffectedbyit.Forinstance,relativetoothercorporations,publicauthoritiesthatmanagealpine areas orwater supplywill be particularly impacted by average temperature increases andchangingweatherpatterns,andthusshouldbeparticularlymindfulofclimaterisks.

• Theabsence(inVictoriaandattheCommonwealthlevel)ofanequivalent'businessjudgmentrule'defenceasprevailsundersection180(2)oftheCorporationsActtoabreachofthedutyofduecareanddiligence.Thebusinessjudgmentrulemayofferadefenceforadirectorofaprivatecorporationiftheyfailtoaccount,oraccountinaninadequatewayforclimaterisk,providedtheywereactingingoodfaithinthedischargeoftheirduties.AsthisdefenceisnotavailableunderthePAActorPGPAAct,itmaymeandirectorsofpublicauthoritiesaresubjecttoanevenmorestringentrequirementtoaccountforsuchrisks.

Dischargingdirectors’dutiesTodischargetherequisitestandardofcare,directorsmustbeproactiveandinquisitive,andobtainadvicefrommanagementorexpertswhere required. Moreparticularly, todischarge theirdutyof care,publicentity directorsmust consider foreseeable risk issues under a proactive and robust process, with theirindependent judgment brought to bear in a process of critical evaluationof contemporary information,includingadvicefrommanagementand/orindependentexpertsasrequired.Procuringadviceandexpertisemaybeparticularlyimportantbecause,whileinformationonaggregate-levelrisksonclimatechangemaybepubliclyavailable,somemoregranularassetlevelanalysiswillrequirespecialisedinformationandexpertinput. Directors have a positive obligation to apply an inquiring mind to their role, bringing to bearknowledge that they ought reasonably have known about the corporation and its investment andoperationalcontext.Themagnitudeoftherelevantphysicalandeconomictransitionrisksassociatedwithclimatechangetotherelevantauthority,andthesizeandnatureofeachentity,willhaveproportionatebearingontherobustnatureoftheconsiderationthatshouldbegiventogovernanceoftheissue. EnforcementforbreachofdutyWhilethecontentoftheobligationstoexerciseduecareanddiligencewithrespecttoclimateriskunderthe Corporations Act and the PA Act and PGPA Act may be substantially similar, the mechanisms forenforcement are very different. In short, theway that public authority directors’ duties are establishedunderthecurrentlegalframeworkmeansthatenforcementforabreachofthosedutiesbyamemberofthepublicisunlikelyinpractice.Whileconsideringclimatechange-relatedrisksmayformpartofthedutytoexerciseduecareanddiligence,atapracticallevel,directorsofpublicentitiesmayfaceminimalriskofprosecutionforfailuretodoso.Thisis primarily because the dutiesmay only be enforced by the public entity itself and/or the responsibleministerwhoappointedthedirector.18WearenotawareofanysuchcaseeverbeinglitigatedagainstanAustralianpublicentitydirector. Itmaybemorepoliticallyexpedientforaministertoremoveadirectorfromofficethantopursuelegalactionagainstthem.Legalproceedingsmaybeevenlessdesirablebecause

18Insomecasespublicauthorityboardsareindemnifiedforthedecisionstheymake.

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generally,thegovernmentinsurermayunderwriteclaimsagainstpublicentitydirectors.Circumstancesmayariseinwhichtheinterestsofthepublicauthorityand/orcommunityareinfactbetterservedbypursuingaclaimagainstapublicentitydirector.However,thisisunlikelytooccurinpractice.Thelowlikelihoodofaclaimbeingfiledforabreachofapublicentity'sdirectors'dutiesdoesnotmeanthatitisunlikelythatthosedutieswillbeenforced.Inparticular,theministerresponsibleforappointingdirectorsis also empowered to suspend or remove the director from office. The prospect of that power beingexercised,orthereputationalharmthatmaybecausedbyalawsuit,mayactasanadequatebehaviouralincentiveforcompliancefromdirectors(ordeterrenttobreach)inpractice.However,giventhefactthatpublicaccountability(atleastbymeansofthird-partyenforcement)islower,inthelatterpartofthispaperwefocusonhowpublicauthoritiescanbestequiptheirdirectorstoproactivelyconsiderclimaterisk,ratherthanthinkingabouthowtoholddirectorstoaccountforafailuretoproperlydischargetheirduties. ConflictingmandatesFinally,asdiscussedearlierintheNAIFcasestudyandelsewhere,directorsneedtoaccountfortheirdutiesarisingunderthewholeregulatoryenvironmentgoverningtheirpublicauthority.Thisincludesthedutiesarisingunder thePAActandPGPAAct frameworks,aswellaselsewhere, including fromtheauthority’sfoundingstatute,ministerialstatementsofobligationandministerialdirections.Thismaycreateproblemsfordirectorsincircumstanceswhereministerialdirectionsorlegislativemandatesconflictwiththedutiesthat they owe under the public accountability law framework. These conflicting mandates may causeconfusionfordirectorsastowhatstandardtofollowwhentheydoconflict,andmayinturnmakeitmorechallengingtoholddirectorstoaccountforactinginamannerthatdoesnotconsiderclimateriskissues.19

Policy Implications of Failure of Public Authorities to Account for Climate Risk Theextenttowhichpublicauthoritiesaccountforclimateriskvaries.20Somepublicauthoritiesarecognisantofthenatureoftheriskandareactingtorespondtoit.Forinstance,MelbourneWaterhassophisticatedinternalcapacityandalsoworkswithexternalbodiestomanageitsclimateriskexposure.21Someofthisinformationisusedforitsday-to-dayoperations,andsometimesthisanalysisisprovidedtotheboardtoguideitsdecisionmaking.WhilewearenotcommentingontheadequacyofMelbourneWater’sapproach,wehighlightthisasacompanyinwhichthedirectorsareatleastreceivingsomeinformationaboutclimaterisk.Ourresearchsuggeststhatnotallpublicauthorityboardshaveadequateawarenessofclimateriskandin some cases come under implicit and explicit political pressure not to consider it. Accordingly, theseentitiesarenotgainingaccess to information toaid theirdecisionmakingordeveloping thecapabilitiesneededtomanageclimaterisk.Thishasseveralfinancialandnon-financialimplicationsforAustralia.

19SeeJohnUhrig,ReviewofCorporateGovernanceofStatutoryAuthoritiesandOfficeHolders(27June2003)<https://www.finance.gov.au/sites/default/files/Uhrig-Report.pdf>,wheretherewassomediscussionaboutconflictingdirectormandates,althoughatthattimethiswasnotinrespectofclimaterisk.WehaveheardfromCPDadvisorsandaffiliatesinthepublicsectorthatpublicauthoritydirectorsmaynowfacethisissueinrelationtoclimaterisk.20Thisisanareawhichisripeforfurtherempiricalresearch.Whileresearchersandpolicymakershavestartedanalysingtheextenttowhichprivatesectordirectors’aremanagingclimaterisk,wearenotawareofsystematicanalysisofpublicsectordirectors’knowledgeofclimaterisk.Ourobservationsinthissectionarebasedonourdiscussionswithpublicsectordirectorsandtheiradvisors.21Forreasonswediscussbelow,MelbourneWater,likeotherVictorianwatercorporationsislegallyobligatedtoconsidertheseissues.

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Onthefinancialside,thecostsassociatedwiththemaintenanceandinsuranceofinfrastructureandotherpublicassetsmaybeincreasedbyafailureofpublicauthoritiestoaccountforclimaterisk–boththephysicalandtransitionrisksdiscussedearlier.22Thenowdecade-oldGarnautReview,forinstance,suggestedthatthecostofunmitigatedclimatechangeonAustralia’sinfrastructurewouldreach0.5percentofGDP(about$9billion)in2020and1.2percentofGDP($40billion)in2050.Additionally,publicauthoritieswillneedtomanageincreasinginsurancepremiums,whicharegrowingasaconsequenceofclimaterisk.23Thesecostscouldbereducedbymoreproactiveclimateriskmanagement.Forinstance,a2014CommitteeforEconomicDevelopmentofAustralia(CEDA)reporthighlightshowhundredsofmillionsofdollarsspentoninsuranceandrepaircostsasaconsequenceofextremefloodinginRoma,Queensland,mighthavebeenavoidedbyresilienceinvestmentsofaround$20millionin2005.24Managingthesecostsanddecisionswillrequirepublicauthoritiestohavesophisticatedcorporategovernancemeasuresinplacetoconsiderandaccountforclimaterisk.25Additionally,theremaybeindirectcostswhichareimposedonpublicauthorities.Theseincludetheabilityofthepublicsectortoraisecapitalforfinancinginfrastructureandcarryingoutitsotheractivities.Overthelast three years, international credit ratings agencieshavebegun to account for governmentpolicy andactivity in theirdecisionsonsovereigncredit ratings.26 Someforthcomingresearchsuggests thathigherclimateriskexposuremayalsobepositivelycorrelatedwithhighersovereignbond issuancecosts.27Theeffectofbothofthesedevelopmentsisthatafailureforpublicauthoritiestodiscloseandclearlyarticulatepathwaysformanagingclimateriskmaypushupthecostofcapitalforthepublicsector.Asidefromfinancialcosts,publicsector institutionsalsofacereputationalcostsforfailingtoaccountforclimaterisk.ThroughitspledgemadeundertheParisAgreement,theAustralianGovernmenthasmadeapoliticalcommitmenttoothernationstoreduceitsemissionsandcontributetotheglobalgoalofachievingnet-zeroemissionsby2050.28Ifthestewardsofpublicauthoritiesarefailingtoaccountforclimateriskintheirdecisionmaking,thisrepresentsaderelictionoftheresponsibilityoftheseentitiestocontributetothebroader government promises made internationally. This failure could have implications for Australia’srelationshipswithothernations.Further,recentresearchhasshownthatclimatechangecontributestothegrowinglackofpublictrustingovernments around theworld. Inpart, this is attributable to the failureof governments to adequately

22TheClimateInstitute,ComingReadyorNot:ManagingClimateRiskstoAustralianInfrastructure(October2011)<http://www.climateinstitute.org.au/verve/_resources/TCI_ComingReadyorNot_ClimateRiskstoInfrastructure_October2012.pdf>.23Banhalmi-Zakaretal,MechanismstoFinanceClimateChangeAdaptationinAustralia(29April2016)<https://www.nccarf.edu.au/sites/default/files/tool_downloads/Finance%20Report%20Final.pdf>.24CommitteeforEconomicDevelopmentofAustralia,TheEconomicsofClimateChange(June2014)<https://www.ceda.com.au/CEDA/media/ResearchCatalogueDocuments/PDFs/22090-Economics-of-Climate-Change.pdf>.25Internationally,thereisalsoincreasingdiscussionaboutthepossibilityofcommencinglitigationagainstpublicauthoritiesforfailingtoaccountforclimaterisk.Thebasisofsuchclaimsisoftenthattheauthoritywasnegligentinitsfailuretoaccountfortheriskhistorically.ThereareanumberoflegaldifficultieswithestablishingnegligenceclaimsunderAustralianlaw,includingissuesrelatedtosovereignimmunityandattributionforharmcaused.Thisisanotherareawherefurtherresearchisneeded.26See,forexample,recentstepstakenbycreditratingagenciesMoody’sandStandard&Poor’s:.Moody’s,EvaluatingtheImpactofClimateChangeonUSStateandLocalIssuers(28November2017)<http://www.southeastfloridaclimatecompact.org/wp-content/uploads/2017/12/Evaluating-the-impact-of-climate-change-on-US-state-and-local-issuers-11-28-17.pdf)>;)>.Standard&Poor’s,seeJoyceCoffee‘CreditRatingAgenciesAssessthePhysicalRisksofClimateChange’(online,22February2018)<https://www.triplepundit.com/2018/02/credit-rating-agencies-assess-physical-risks-climate-change/>.27MarcusPainter,‘AnInconvenientCost:TheEffectsofClimateChangeonMunicipalBonds’(forthcoming)JournalofFinancialEconomics<https://papers-ssrn-com.stanford.idm.oclc.org/sol3/papers.cfm?abstract_id=3167379>(accessed,5June18).28ParisAgreement,openedforsignatureon22April2016,[2016]ATS24(enteredintoforce4November2016)),art4.1.

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respondtoclimatechange.29Afailurebypublicauthoritiestoaddressclimateriskissuescouldcontributetothisbroaderphenomenon.Thisisparticularlythecasegiventhattheseauthoritiesareoftenresponsibleforinfrastructureandotherassets,managingnaturalresourcesandthedeliveryofpublicserviceswhichareparticularlysalienttothepublic(suchaswatercatchments,alpineresorts,publicsectorsuperfundsandemergencyservices).Forinstance,thereisincreasingevidenceshowinghowclimatechangeaffectshumanhealth, including impacting the number of heat-related deaths.30 This type of health issue may haveimplicationsforanorganisationsuchasAmbulanceVictoriaorequivalentsinotherstates.Finally,asrecipientsofpublicmoneyandrepresentativesofthestate,publicauthoritiesshouldmaintainthebeststandardsofcorporategovernance.ThisisaviewwhichfindssupportinthelonghistoryofpublicpolicydiscussionongovernanceofpublicauthoritiesinAustralia.31TheUhrigReviewin2003,forinstance,involvedaconsiderablereviewofpublicauthoritiesgovernancepracticesattheCommonwealthlevelforthepurposesofdetermininghowtointroducebestpracticesfromprivatesectorgovernanceintothepublicsphere.32Leadingprivatecompaniesarealreadymovingtowardsmoresophisticatedmethodstoconsiderandmanageclimaterisksandothersustainabilityissues.RecentproposedupdatestotheASX’sCorporateGovernance Council’s Principles and Recommendations call explicitly for listed entities to, for example,reviewboards’skillsmatricesanddirectorinductionprocessestoreflectnewandemergingissues,includingclimaterisk.33Thebenchmarkfordirectorsisalreadyrising.Giventhegrowingconsensusontheimportanceofclimaterisk,andasuiteofincreasinglysophisticatedtoolsformanagingsuchrisk,itisincumbentonpublicinstitutionstobeproactiveactorsonthisimportantcorporategovernanceissue.

Policy Approaches to Encourage Consideration of Climate Risk Giventheimportanceofclimaterisktopublicauthorities,wethinkthatseveralpolicystepscouldbetakentoencouragedirectorsofpublicauthoritiestobetteraccountforclimaterisk. Ideally, theapproachthatAustraliangovernmentstakeinmanagingclimateriskissueswithinpublicauthoritiesshouldbepartofmoreholisticsustainablefinanceagendaandabroadersuiteofclimatepolicyreforms.34However,inthissectionweonlyconsiderthenarrowerissueofaddressingclimateriskwithinpublicauthorities.

29KatherineHarrisonandLisaSundstrom,GlobalCommons,DomesticDecisions:TheComparativePoliticsofClimateChange(MITPress,2010).ResearchersatMITarestartingtodemonstratethewayinwhichclimatechangeisimpactingpoliticalandgovernancesystems.Foranexamplesee:NickObradovich,‘ClimateChangemaySpeedDemocraticTurnover(January2017)ClimaticChange140(2)135,abstractat<https://www.media.mit.edu/publications/climate-change-may-speed-democratic-turnover/>.30TheAustralianAcademyofSciencehasusefulinformationonthislink:TonyMcMichaelandAparnaLal,‘ClimateChangeandHumanHealth’(28July2015)<https://www.science.org.au/curious/earth-environment/climate-change-and-human-health>.31MeredithEdwardsetal,PublicSectorGovernanceinAustralia(ANUEPress,2012).<https://press.anu.edu.au/publications/series/australia-and-new-zealand-school-government-anzsog/public-sector-governance/download>.32JohnUhrig,ReviewofCorporateGovernanceofStatutoryAuthoritiesandOfficeHolders(27June2003)<https://www.finance.gov.au/sites/default/files/Uhrig-Report.pdf>.33ASXCorporateGovernanceCouncil,ReviewoftheASXCorporateGovernanceCouncil’sPrinciplesandRecommendations(ConsultationPaper,2May2018)<https://www.asx.com.au/documents/asx-compliance/consultation-paper-cgc-4th-edition.pdf>(theConsultationPaper).Inaddition,theConsultationPaperincludesaproposedadditiontocommentaryforprinciple3oftheASXCouncil’sCorporateGovernancePrinciplesandRecommendationstomakeitclear“thatalistedentity’s‘sociallicencetooperate’isoneofitsmostvaluableassetsandthatthelicencecanbelostorseriouslydamagediftheentityconductsitsbusinessinawaythatisnotenvironmentallyorsociallyresponsible”:15.Althoughcontroversial,theseprovisionspointtothehigh-standardbeingcontemplatedbytheASXCorporateGovernanceCouncilwithrespecttoprivatesectordirectors.34ForfurtheranalysisonAustralia’spotentialapproachtointroducingasustainablefinanceagenda,seeCentreforPolicyDevelopmentSubmissionNo129to,SenateForeignAffairs,DefenceandTradeReferencesCommittee,ParliamentofAustralia,InquiryintoUnitedNationalsSustainableDevelopmentGoals(undated)<https://www.aph.gov.au/DocumentStore.ashx?id=4baca756-bef3-4ed2-abc5-eb0f1156cb41&subId=564752>.

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The following suggestions range frommeasures that work within current legislative and accountabilityframeworksthroughtonewlegislatedrequirementsforbetterwhole-of-governmentapproachestoclimaterisk.TheserecommendationsareintendedasastartingpointforfurtherexplorationbygovernmentsatthestateandCommonwealthlevel.Theyraisesomepossibleavenueswhichareworthyoffurtherexploration,andsomeofthemechanismsbywhichreformsonclimateriskcouldbepursued.Theyrangefromthosewhicharemoreeasilyimplementablethroughtomorecomplexsuggestions,withthelatterhavinggreaterpotential staying power over the long term.35 While we have structured these as separaterecommendations,theyarenotmutuallyexclusive.1. Create a whole-of-government toolkit and implementation strategy for considering and managingfinancialrisksarisingfromclimatechange.Public sector directors face several competing priorities and obligations. A toolkit for considering andmanaging climate-related financial risks would help public sector directors across the range of publicauthoritiesinAustraliatoconsistentlymanagetheserisksamongthesecompetingpriorities.Relevantactors:

• Theofficesofthepublicsectororpublicservicecommissioneroritsequivalent.Theseinstitutionsgenerallyhaveoversightoverthebehaviourofpublicsectoremployees.InVictoria,thePAActgivesauthoritytothePublicSectorCommissionerwithrespecttothebehaviourofboardmembersofpublicauthorities.

• Environmentalcommissionersorotherenvironmentalpolicymakingbodies(suchasenvironmentalprotectionagenciesorenvironmentalministries).

• Ministriesresponsibleforthemanagementofpublicauthorities(mostoften,ministriesoffinance).Recommendations:A‘publicauthoritiesclimaterisktoolkit’mightbestructuredaroundaseriesofquestionstoaskabouthowdifferentclimaterisks(seeFigure1onnextpage)applytoagivenorganisation,andthensomepossibleresources toconsultordecision-makingstrategies to respond to those risks.TheTaskforceonClimate-related Financial Disclosures (TCFD), provides some useful approaches for thinking about the differentdomainsthatanorganisation,likeapublicauthority,shouldthinkabouttomanageclimaterisks.A toolkit of this naturewould need to be developed in a coordinatedway across various governmentdepartments, includingenvironmentalministrieswhomayhaveexpertiseonmodellingclimateimpacts,alongwith financeministrieswhomay have tools and expertise available to them in relation to boardgovernance.Giventheemphasisonimprovingtheeffectivenessofthepublicsector,suchcoordinationmaybebestcarriedoutbythepublicsectororpublicservicecommissioner.Atoolkitofthisnaturecouldtakemanyforms.Itmaybevoluntaryorcompulsory.Asastartingpoint,wewouldrecommendthatthetoolkitadapttheTCFDstandards(withCPD'ssuggestionsfromits2018Climate

Horizons report) as a benchmark.36 The TCFD is a frameworkwhich allows organisations to assess and

35These recommendations arebasedonCPD’s internal researchand input froma roundtableonClimateChangeRisk andPublic SectorDirector’sDutiesco-hostedbyCPDon23October2018.36SamHurleyandKateMackenzie,ClimateHorizons(Report,June2018)<https://cpd.org.au/wp-content/uploads/2018/06/Climate-Horizons-report-2018.pdf>.InadditiontotheTCFD,thistoolkitcoulddrawonanumberofotheremergingframeworksandtoolkitsthatarebeingdevelopedtoassistinvestorsandotherprivatesectoractorsmanagetheirclimaterisks.Forexample,seeInvestorGrouponClimate

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disclosepotentialbusiness,strategic,andfinancialimplicationsofclimate-relatedrisksandopportunities.Since its development, leading financial regulators, institutions and global investors have supported theTCFDrecommendationsasbestpractice.InlinewiththeprinciplesthatunderpintheTCFDframework,theresultsofassessmentscarriedoutusingatoolkitofthisnatureshouldbedisclosedtothepublic.Also,inlinewiththeTCFD,thistoolkitshouldrequirepublicauthoritiestoconsiderhowclimateriskscouldevolveunderarangeofdifferentclimatescenarios,notjustasubsetofthemostlikely(ormostfavourable)outcomes.

Figure1:FinalReportoftheTCFD,page8.

Effectiveuseofatoolkitofthiskind,andbettermanagementofclimateriskgenerally,requirescapabilitieswithinpublicauthoritiesand/ortheirmanagingdepartmentstocarryoutsophisticatedclimateriskanalysis.Atoolkitcoulditselfhelptodevelopthesecapabilitiesovertime.Forexample,aclimaterisktoolkitcouldbeusedaspartofformalinductionprocessesfornewpublicsectorappointeestoensurebetterawarenessoftheirdutiesandframeworksforconsideringclimaterisks.Itcouldalsoinformmorerigorousprocessesandskillsmatricesfor independentpublicsectorboardappointments,byhighlightingtheneedtofactorclimate-relatedexpertiseandcapabilityintodecisionsaboutrecruitmentandboardcomposition.37Giventheir existing roles in recruitment and trainingprocesses for incomingpublic authority boardmembers,publicserviceorpublicsectorcommissionerscouldhavearoletoplayhere(discussedfurtherbelow).38

Change(2018)InvestinginResilience:ToolsandFrameworksforManagingPhysicalClimateRisk(Report,2018)<https://igcc.org.au/wp-content/uploads/2018/07/IGCC-Investing-in-Resilience-report_FINAL.pdf>.37Thisisalsoanemergingfocusintheprivatesector.Forexample,theBankofEngland’sPrudentialRegulatoryAuthorityrecentlypublishedadraftsupervisorystatementcallingforbanksandinsurerstoclearlyidentifyspecificrolesandresponsibilitiesforboards,subcommitteesandseniormanagementinmanagingthefinancialrisksfromclimatechange:BankofEngland,EnhancingBanks’andInsurers’ApproachestoManagingtheFinancialRisksfromClimateChange(ConsultationPaper23of2018,October2018)<https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/consultation-paper/2018/cp2318.pdf?la=en&hash=8663D2D47A725C395F71FD5688E5667399C48E08>.38Forexample,seetheVictorianPublicServiceCommissioner’sRecruitmentandAppointmenttoolkit:VictorianPublicServiceCommissioner,RecruitmentandAppointmenttotheBoard(Toolkit)(1March2015)<https://vpsc.vic.gov.au/resources/recruitment-and-appointment-to-the-board-toolkit/>.

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Separately,atoolkitwouldalsoreinforcetheimportanceofboardprocessesforgatheringandconsideringappropriateinformationaboutclimaterisk,includingdrawingondepartmentalofficialsorexternalexpertisewherenecessary.

2.Useexistingpublicauthorityaccountabilitymechanismstostrengthenmanagementofclimate-relatedfinancialrisks.Governmentactorsandbodiesthatarechargedwithmonitoringfinancialmanagementandperformanceofpublicauthoritiesshoulduseexistingpowersandprocessestoreviewpublicauthorities’processesandcapabilitiesformanagingclimaterisk.Ataminimum,whererelevant,departmentalheadsshouldensurethatpublicauthoritieswithintheirremitareproperlymanagingclimateriskaspartoftheiroversightoftheefficient and effective management of their departments. Further-reaching reviews should also beconsidered,particularlyforjurisdictionsorsectorswhereclimaterisksareofparticularconcern.Thereareanumberofoptionsunderexistingaccountabilitymechanisms.Relevantactors:Public authorities are currently held to account by different public sector bodies, depending on thejurisdiction in which they sit and their establishing statutory framework. There are, however, severalgovernmentbodieswhichhavesomeresponsibilityforoverseeingtheactivityofpublicauthoritiesacrosstheCommonwealthandVictoria(andpotentiallyotherstates/territories)regardlessoftheirestablishingframework.Thesebodiesinclude:

• Headsofgovernmentanddepartments.Theheadofgovernment(suchasthepremierofastate)orheadsoftherelevantsupervisingdepartment(suchasadepartmentalsecretary)underwhichthepublicauthoritysits.

• The auditor-general's office. The auditor-general in each jurisdiction has a role to carry outcompliance and performance audits on the activities of government departments and publicauthorities.

• Public financeregulatorybodies.This includespricingregulatorsandministriesof financewhichmanagethebudgetsofpublicauthorities.

Inadditiontothesegovernmentbodies,wethinkthatcivilsociety,mediaandresearchorganisationsalsohavearoleinensuringthatthereisgreaterscrutinyovertheactivitiesofpublicauthoritiesandtheirclimaterelateddecisionmaking.Recommendations:HeadsofgovernmentordepartmentThepublicsectormanagementineachjurisdictionoftenincludesgeneralpowerswhichareexercisablebyheadsofgovernmentordepartments.BelowweoutlinetwosuchpowersundertheVictorianPAAct.

• Section13ofthePAActgivesresponsibilitiestothesecretariesofdepartmentswithrespecttothe“effective,efficientandeconomicalmanagement”oftheirdepartments.Giventhefinancialnatureofclimaterisks,secretariesmaybeabletotakeadvantageofthispowertocarryoutanalysisofpublicauthoritieswhichareundertheresponsibilityofthedepartment.However,thisprovision

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onlyappliestopublicauthoritieswhichreporttothedepartmentsecretarydirectly.Manypublicauthoritiesdonotreporttodepartmentheads,butinsteadtotheresponsibleministerdirectly.39

• Section56ofthePAActcreatespowersforthePremiertodirectthePublicSectorCommissioner

tocarryoutaspecialinquiryintopublicauthorities.ThescopeofthispowerisbroadandallowstheCommissionertocollectevidencefrompublicauthorities.Usuallytheseinquiriesareusedforex-postanalysisofhistoricalevents.ButthepowersasoutlinedundertheActarebroadenoughtobeusedforex-anteanalysisofthepreparednessofpublicauthoritiestomanageclimaterisk.

It is important that policymakers analyse the provisions of the public sector acts within their ownjurisdictions as the same rules do not apply universally. For instance, the PGPA Act does not give theCommonwealthPublicServiceCommissionerequivalentpowers.ThePublicSectororPublicServiceCommissioner

Inadditiontotheuseofspecialinquiries,itmayalsobepossibletouseexistingpublicsectororpublicservicecommissionerstructurestohelpbuildthecapabilityofpublicauthoritiestobetteraccountforclimaterisk.Aswediscussedabove,publicsectororpublicservicecommissionersmighthelpadministertoolkitsanddelivertrainingtopublicauthoritiesonclimaterisk.

Auditors-General

Auditors-Generalhavepowerstocarryoutcomplianceaudits, throughwhichtheAuditorcanassessthecomplianceofpublicbodiesagainstlegislatedstandardsofoperation.Theseauditsareusuallycarriedoutannuallyforeachorganisation.Performanceaudits,bycontrast,arewhenAuditors-Generalassesssomeaspect of performance of a public body. The Auditor has authority to determine on what aspects ofperformanceitwillcarryoutanaudit.Suchauditsarenotcarriedoutonaregularbasis.Asitstands,complianceauditscannotbeusedtoauditclimateriskcompliance,becausetheserisksdonotalways form part of public authorities’ legislated standards of operation. As discussed later, we thinklegislativechangetoensureclimateriskisproperlyaccountedforintheseauditingprocessesiswarrantedin order to ensure public sector standards are consistent with emerging best practice on climate andsustainability-relatedrisksintheprivatesector.However,itmaybepossibleforAuditors-Generaltotakeaccountofclimateriskaspartoftheirperformanceauditfunction.Forexample,anAuditorcoulddecidetocarryoutanalysisoftheextenttowhichaselectgroupofimportantpublicauthoritiesareconsideringandmanagingclimaterisk,inmuchthesamewasasASIChasdonewithrespecttoprivatesectorcorporations.40Thiswouldprovideausefulsignaltootherpublicauthoritiesinajurisdictionthatthisisanareaoverwhichthe Auditor will be focussing attention. However, an intervention of this nature ultimately falls to thediscretionoftheAuditor.Publicsectorfinancialregulators

Public sector financial regulatorsmayalsoplayauseful role inencouragingpublicauthoritydirectors toaccountforclimaterisk.Asoneexample,theEssentialServicesCommission(ESC)inVictoriasetsthepriceboundariesforhowmuchsomepublicauthoritiescanchargefortheirgoodsandservices,i.e.theESCsets

39Forinstance,section16oftheAlpineResorts(Management)Act1997(Vic)establishesthattheAlpineManagementBoardisresponsibletotheministerdirectly.40ASIC,‘ClimateRiskDisclosurebyAustralia’sListedCompanies’(ReportNo593,September2018)<https://download.asic.gov.au/media/4871341/rep593-published-20-september-2018.pdf>.

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the prices thatwater boards can charge forwater. Thus the ESCmayplay a useful role in encouragingdirectorstoaccountforclimateriskbyconsideringtheextenttowhichtheyhaveaccountedforsuchrisksinthewaytheysetprices.Ministriesoffinance,whichmanagepublicauthorityfinances,couldalsoplayasimilarrolebyaskingorrequiringpublicauthoritydirectorstoexplainhowtheyareconsideringtheserisks.Civilsociety,mediaandresearchorganisations

As a general matter, public authorities in Australia are among the least transparent – and thus leastscrutinised–publicsectorinstitutions.41Thisisbothbecausethescopeoftheiractivityintheeconomyandinsocietyingeneral isnotwellunderstood,andbecausetheirgovernanceiscomplicatedanddifficulttounderstand.This isanimportantpointbecausethesepublicauthorities’responsestoclimateriskwillbecrucial,giventheirlargeeconomicrole.Inourviewthereneedstobescrutinyofhowwelltheseauthoritiesareperforming,commensuratetothe levelofscrutinyplacedonprivatefirms.Althoughtherearesomeexistingaccountabilitymechanismsfortheseentities(aswehavediscussedthroughoutthispaper),theyarenot well targeted to climate risk and there aremajor gaps in scrutiny and transparency. As such, it isimportantthatAustraliancivilsociety,mediaandresearchorganisationsplayacloseroleinscrutinisingthewaythesebodiesmakedecisionsonclimaterisk-relatedissues.Tothisend,itmaybeusefulforacivilsocietyorresearchorganisationtodevelopacentralisedsourceofallinformationonpublicentitybodiesinAustraliawhichareparticularlyrisk-pronewithrespecttobothphysicalandtransitionrisk.Thismayfacilitategreaterpublicaccountabilityofdecisionmakingoftheseinstitutions.3.Issueministeriallevelstatementsofexpectationstoclarifyhowpublicauthoritiesandtheirdirectorsshouldmanageclimate-relatedrisksandpolicypriorities.Asdiscussedearlier,statutoryobligationsforpublicsectordirectorstoconsiderclimate-relatedrisksinteractwith,andtosomeextentareconditionedby,dutiesandobligationsflowingfromotherlegislation,formaland informalministerialdirections, andclimatepolicyatdifferent levelsofgovernment.This cancreateambiguityaboutwhether,andhow,duties toconsiderclimateriskcanbeproperlydischargedbypublicauthorities, especially in cases of real or perceived conflict with other duties or mandates. Thisrecommendationoutlinesapproachesfordealingwithsuchambiguity.Relevantactors:

• Ministersacrossthecabinet,whowillhavesomeresponsibilityovertherangeofpublicauthorities.• StateandCommonwealthgovernments.Clearerandhigherexpectationsforhowpublicauthorities

respondtoclimateriskshouldbeoneelementofmoreambitiouswhole-of-governmentactionstoaddress climate risk and deliver on wider policy goals such as Australia’s emissions reductionstargets.

Recommendations:Governmentscouldissuestatementsofexpectationsorintent(attheCommonwealthlevel)orstatementsofobligations(inVictoria)whichsetouthowpublicauthoritiesareexpectedtodischargeandreportontheirobligationstoconsiderandmanageclimaterelatedrisksandsupportbroaderclimate-relatedpolicy.ThesecouldfollowtheexampleoftheVictorianGovernment’sStatementofObligations(EmissionsReductions),undertheWaterIndustryAct1994(Vic),whichoutlinestheState’sclimatepolicyandcommitments,sets

41Edwardsetal,PublicSectorGovernanceinAustralia(ANUEPress,2012)<https://press.anu.edu.au/publications/series/australia-and-new-zealand-school-government-anzsog/public-sector-governance>.

PAGE 19

emissionsreductionstargetsforeachofVictoria’swatercorporations,andestablishesaclearprocessforreporting,disclosureandrectificationoffailurestocomplywiththestatement.Statementsofthesekindswouldprovidegreaterclarity, transparencyandaccountabilityaroundthegovernanceofclimate-relatedfinancialrisksbypublicauthorities. 4.Considerlegislativeorregulatorychangestoensureconsistentconsideration,managementanddisclosureofclimateriskbypublicsectordecisionmakers.

Asdiscussedearlier, therearesomeaccountabilitymechanismsalready inplacewhichcouldbeusedtobetter highlight and hold public authority directors to account in relation to addressing climate risk.However,thesemechanismsarenotanidealfitforthispurpose.Severalaremechanismswhicharead-hocinnature–suchastheperformanceauditpowerofauditors-general–andrelyondecisionstakenby,andtheprioritiesperceivedby,individualsoccupyingtheofficesofminister,auditor-generalorpublicsectororpublicservicecommissioneratagivenpointintime.Othermechanismsthatarecurrentlyavailable,suchasthe special inquiry power under the PA Act discussed earlier, are blunt instruments whichmay not bepolitically feasible. With this context in mind, policymakers should consider regulatory and legislativechangestocreateaframeworkwhichismoreamendableforpublicauthoritiestoaccountforclimaterisk.

Relevantactors:

• Ministersacrossthecabinet,whowillhavesomeresponsibilityovertherangeofpublicauthorities.• StateandCommonwealthgovernments.

Recommendations:Anygovernmentseekingto introduceregulatorychangeshould,asastartingpoint,consult therelevantpublicsectoraccountabilityframework.Theselawsalreadyincludesomelegislatedpowerswhichcouldbeused to make regulatory (as opposed to legislative) changes to better incorporate climate riskconsiderations.Forinstance,sections102and103ofPGPAActallowtheCommonwealthDepartmentofFinancetomakerulesinrelationtopublicauthorityboardsregarding‘riskoversightandmanagement’.TheDepartmentmaybeabletousethisexistingpowertocreatespecificguidelinesforhowCommonwealthpublicauthorityboardsmanageclimaterisk.A sui-generis legislative regime on public authority climate risk would allow governments to be moreambitiousandwholisticinhowtheymanagethisissue.Forinstance,governmentscouldrequireboardstofollowaprojectapprovalprocessestoassessclimateriskexposureforeachprojectthatthepublicentitypursues.Suchaprocessmightrequireentitiestoconsidertheimplicationsoftheprojectunderdifferentclimatechangescenarios,includingtheinternationally-agreedgoaltolimitwarmingtowellbelow2°Cand‘business as usual’ projections of climate change based on the current global emissions trajectory (i.e.warmingof4°Cormore).Alternatively,alegislativeregimecoulddirectpublicauthoritiestomakedecisionsthatareconsistentwitha specifiedemissions reductions trajectoryor target,or toensure thatdecisionmakingisdoneinawaythatisconsistentwiththeUN’sSustainableDevelopmentGoalframework.Legislativeandregulatorychangeswouldbethemostchallengingmeasurestointroduce.However,theyare useful because, unlike all the previous recommendations in this section, they would provide asystematic,consistentframeworkfordecisionmakingacrossallrelevantpublicentitiesthataremorelikelytowithstandchangesofgovernment.

PAGE 20

Appendix1:DetailedLegalAnalysisofCommonwealthandVictorianPublicAuthorityDirectors’Duties

Commonwealth – Public Governance, Performance and Accountability Act 2013 (Cth) (PGPA Act) ScopeofDuty SubjectofDuty Defences? Justiciabilityandconsequences

Section25(1)ofthePGPAActdetailsthedutyofCommonwealthofficials.Thisissimilarly

wordedtosection180(1).

Thesectionstates:

AnofficialofaCommonwealthentitymust

exercisehisorherpowers,performhisorher

functionsanddischargehisorherdutieswith

thedegreeofcareanddiligencethata

reasonablepersonwouldexerciseiftheperson:

(a) WereanofficialofaCommonwealth

entityintheCommonwealthentity’s

circumstances;and

(b) Occupiedthepositionheldby,and

hadthesameresponsibilitieswithin

theCommonwealthentityas,the

official.

TheaccountableauthorityofaCommonwealth

entityissubjecttoanumberofotherduties

underthePGPAAct.Thisincludesadutyundersection15ofthePGPAActtogoverntheentityinawaythatpromotes:

- Properuseandmanagementof

publicresourcesforwhichthe

authorityisresponsible

- Achievementofthepurposesofthe

entity;and

- Thefinancialsustainabilityofthe

entity.

Officials(ie.accountable

authority,officer,employeeor

member)ofCthentities(both

statutoryandCorporationsActcorporations–exceptCth

companies)(sections5,10and

25).

Accountableauthorities(ie

governingbody,suchasa

boardorcouncil)(sections8

and12).

Section25(2)statesthatrulesmay

prescribesituationsinwhichsection

25(1)willbesatisfied.

ThePGPAActExplanatoryMemorandumstates“[i]tisintended

thatrulesmadeundersubclause

25(2)willdealwiththeexerciseof

businessjudgmentandrelianceon

advicewhenmakingdecisions”

(paragraph188).

Todate,nosuchruleshavebeen

made.

Section30statesthattheappointermayterminatethe

employmentofaperson(whotheyhaveappointed)ina

corporateCommonwealthentityincertaincircumstances,

includingwherethatpersonhascontravenedsection25(1).

JudicialreviewunderConstitutionalWritsofappointer’s

decisiontonotdismiss

Anapplicationformandamuswilllikelybeunsuccessful,

becausethereisnoapparentdutyfortheappointerto

considerexercisingthediscretion.Adeclarationmightbe

possible.

However,itislikelythatonlythecorporation(and

shareholders),relevantMinister,andofficerinquestionwill

havestanding.

JudicialreviewunderADJRAct1977(Cth)ofappointer’sdecisiontonotdismiss

Assumingthatthedecision(orfailuretodecide)fallswithinthe

ambitoftheAct,standingwilllikelybedifficulttoestablish,andverysimilartothesituationunderthecommonlaw,stated

above.

Declarationofbreachofdutybyofficial

Adeclarationthatanofficerhasbreachedadutymaybe

available.Whereanofficer’sconductisbeingexamined,itwill

notmerelybeahypotheticalorabstractquestion.Italsohas

foreseeableconsequencesfortheofficer;namely,termination.

However,itisunlikelythatamemberofthepublicwillhave

therequisite‘realinterest’inwhethertheofficerhasbreached

theirduty.Itisalsolikelythatstandingwouldonlybeavailable

tothecorporation(andshareholders),therelevantMinister

andofficerinquestion.

PAGE 21

ScopeofDuty SubjectofDuty Defences? Justiciabilityandconsequences

NootherliabilityunderPGPAAct

InrelationtocorporateCommonwealthentities,thereisno

civilpenaltyorcriminalliabilityforbreachofstatutorydutiesin

thePGPAAct.

Therewascriminalandcivilliabilityforbreachofthisdutyin

theCommonwealthAuthoritiesandCompaniesAct1997(Cth),althoughthiswasomittedfromthePGPAAct“toavoidduplicationofprovisionsalreadyexistingunderother

legislationorlegalarrangements”(paragraph65,Replacement

ExplanatoryMemorandum,PGPAAct).

PAGE 22

Victoria – Public Administration Act 2004 (Vic) (PA Act)

ScopeofDuty SubjectofDuty Defences? Justiciabilityandconsequences

Section79(1)hasabroaderscopeandislessdetailedthan

section180(1).However,itstillrequiresareasonabledegreeof

care,diligenceandskill.Climatechangeriskappearstobe

relevanttothisduty.

“Adirectorofapublicentitymustatalltimesintheexerciseof

thefunctionsofhisorherofficeact-

(a) honestly;and

(b) ingoodfaithinthebestinterestsofthepublicentity;

and

(c) withintegrity;and

(d) inafinanciallyresponsiblemanner;and

(e) withareasonabledegreeofcare,diligenceandskill;

and

incompliancewiththeActorsubordinateinstrumentorother

documentunderwhichthepublicentityisestablished.”

Itisnotedthattheadditionalterm'skill'intheformulationof

thePAActdutyisunlikelytorendertheobligationmaterially

differentinsubstancetothatundersection180ofthe

CorporationsAct.Evenifthattermwasheldtoimplyan

additionalobligationonpublicentitydirectors,itwouldbe

likelyoperatedtoelevatetheobligationsowedbypublicentity

directorsabovethoseintheCorporationsAct.Accordingly,thedifferencesinterminologyunderthetwoprovisionswouldnot

operatetoderogatefromthestandardofcareowedbypublic

entitydirectors.

Directors(amemberoftheboardofapublicentity–

whereboardmeansthegoverningbodyor,otherwise,

themembersofthepublicentity)ofapublicentity.

Publicentitiesare:

- corporateorunincorporated;and

- establishedbyanAct,theCorporationsAct,by

theGovernorinCouncilorbyaMinister;and

- ifabodycorporate,bodieswheretherightto

appointatleastonehalfofthedirectorsis

vestedinGoCorMinister;and

- Thosewhichhaveapublicfunctiontoexercise

onbehalfoftheStateorarewhollyownedby

theState;and

- Ifitdoesnothaveapublicpurposeotherthan

toprovideadvice,ithas

o Writtentermsofreference;and

o Isrequiredtoprovidetheadviceor

reporttotheMinisterorGovt;and

o Isdeclaredtobeapublicentityfor

purposesofthisActbyAct/subordinate

instrumentunderwhichitisestablished

orbyanOrderundersection5(3).

Section79(andtherestofpart5)commencedon1

July2005.

None. Section86statesthattheMinistermayapplyto

theMagistrates’Courtforaninjunctionthat

wouldrestraintheentityordirectorfrom

engaginginconductthat:

- contravenestheAct

- isotherwisecontrarytolaw.

Section87providesthattheMinisterresponsible

forthepublicentitymay,inthenameofthe

publicentity,recoverfromthedirectorthedebt

dueincourt:

- anamountequaltotheprofitifaprofit

hasbeenmade,or

- anamountequaltotheloss,ifalosshas

beensuffered.

Anapplication(orafailuretoapply)undersection

86willnotconstitutea‘decision’underthe

AdministrativeLawAct1978(Vic)andwillthereforenotbereviewable.Itisalsolikelythat

section87willnotbea‘decision’.Inanycase,

standingundertheActwilllikelybesimilartothat

forconstitutionalwrits,andwillthereforebe

severelyrestricted.

PAGE 23

SeealsoCodeofConductforDirectorsofVictorianPublicEntities2016(Code)issuedbythePublicSectorCommission.

PublicentitydirectorsareboundbytheCodepursuantto

sections40(b),61and62ofthePAAct.TheCode'setsthestandardofbehaviourexpectedofdirectors'inamannerthat

broadlyreflectstheprevailinginterpretationofsection180of

theCorporationsAct.TheCoderelevantly:

(a) replicatesthe'publicsectorvalues'setoutinsection

7ofthePAAct.Theseincluderesponsiveness(includingidentifyingandpromotingbestpractice)

andimpartiality(includingactingfairlybyobjectively

consideringallrelevantfactsandfaircriteria);

(b) reiteratesandexpandsuponthedutyofcareand

diligencesetoutinsection79ofthePAAct,viz:

Directorsexercisetheirpowerswithareasonabledegreeof

care,diligenceandskill.Theyunderstandthebusinessofthe

publicentityandtheroleoftheBoard.Theyactresponsibly,

drawingonanyknowledgetheypossesswhenconsidering

mattersbeforetheBoard.

Directorsseekandconsiderallrelevantinformationandignore

irrelevantinformation.Theybasetheirdecisionsonthebest

informationavailableatthetime,seekfurtherinformationif

necessary,andacceptresponsibilityfortheiractions.

DirectorsaskquestionsaboutmattersbeforetheBoard.They

mayaskmanagementfordetailedbriefingsonthepublic

entity’sbusinesstoinformstrategicplanningandrisk

minimisation.

DirectorsregularlyattendBoardmeetings,areactivelyinvolved

inmattersbeforetheBoardandconsiderthefinancial,

strategicandotherimplicationsofBoarddecisions.

Division2(whichcontainssection79)onlyappliesto

publicentitiesthatwereestablishedonorafterthe

commencementofthePart,exceptwhereanOrderis

madeundersection75(a)statingotherwise.Anorderis

madebytheGovernorinCouncilandpublishedinthe

GovernmentGazette(section75).

PAGE 24

Appendix2:ExamplesofpublicauthoritiesattheCommonwealthlevel1

1Thistableprovidesexamplesoftwotypesofpublicauthorities(CommonwealthCompaniesandCorporateCommonwealthEntities)attheCommonwealthlevel,ofwhichtherewere89intotalatSeptember2018.

Theseentitieswerechosenbecausetheymightbeparticularlyimpactfultoorimpactedbyclimaterisk.ItisanextractfromtheAustralianGovernmentOrganisationsRegister(September2018),whichisavailablein

fullat<https://www.directory.gov.au/reports/australian-government-organisations-register>.

Entityname Policyportfolioarea Typeofpublic

authority

Description Establishingstatute Created

AboriginalHostels

Limited

PrimeMinisterand

Cabinet

Commonwealth

Company

AboriginalHostelsLimited(AHL)contributestoIndigenous

Australians'qualityoflifethroughthedeliveryofaccommodation

andsupportservicesacrossitsnationalnetworkofaccommodation

facilities,enablingaccesstoabroadrangeofeducation,

employment,healthandotherservices.Thecompanyhas

maintaineditscommitmenttodeliveringshort-termaccommodation

toAboriginalandTorresStraitIslanderpeoplewhomustliveaway

fromtheircountrytoaccessservicesandeconomicopportunity.

CorporationsActcompanycontrolled

bytheCommonwealth

06Jun

1973

ASCPtyLtd Finance Commonwealth

Company

ASCgroupconsistsoftwomainbusinesses,ASCPtyLtd,Australia’s

sovereignsubmarinecompanywhich,aspartoftheAustralian

SubmarineEnterprisewiththeRoyalAustralianNavyand

DepartmentofDefence,ensuresthesovereignmaintenanceand

capabilitydevelopmentoftheCollinsClasssubmarinefleet.

ThesecondpartofthecompanyisASCShipbuilding,Australia’sonly

builderofmajorsteel-hulledwarships.ASCShipbuildingisthelead

shipbuilderofAustralia’smostcomplexmajorwarships,theAir

WarfareDestroyers,aspartoftheAWDAlliance.

CompanyLimitedbyShares 03Nov

2000

AustralianNaval

InfrastructurePty

Ltd

Finance Commonwealth

Company

TheAustralianNavalInfrastructurePtyLtd(ANI)isawholly-owned

Commonwealthcompany,boundbytheCorporationsActandthePGPAAct,thatoperatesatarmslengthfromGovernment,andwas

prescribedasaGovernmentBusinessEnterprisewitheffectfrom1

July2017.

CompanyLimitedbyShares 26Mar

2017

AustralianNuclear

Scienceand

Technology

Organisation

Industry,Innovation

andScience

Corporate

Commonwealth

Entity

TheAustralianNuclearScienceandTechnologyOrganisation

(ANSTO)isAustralia'snationalnuclearresearchanddevelopment

organisation,andthecentreofAustraliannuclearexpertise.Its

uniqueexpertiseisappliedtoradiopharmaceuticalproduction,

researchintoareasofnationalpriorityincludinghealth,materials

engineeringandwaterresourcemanagementandhelpingAustralian

industriessolvecomplexproblems.Italsoprovidesexpertadviceto

Governmentonallmattersrelatingtonuclearscience,technology

AustralianNuclearScienceandTechnologyOrganisationAct1987

02Jul

1953

PAGE 25

andengineering.ANSTOoperateslandmarknationalscientific

facilities,includingOPAL,Australia'sonlynuclearresearchreactor,

andmorerecentlytheAustralianSynchrotron,forthebenefitof

industry,theAustralianresearchcommunityandallAustralians.

AustralianPostal

Corporation

Communications

andtheArts

Corporate

Commonwealth

Entity

AustraliaPostprovidespostalserviceswithinAustraliaandbetween

AustraliaandplacesoutsideAustralia.

AustraliaPostisprescribedasaGovernmentBusinessEnterprise

underthePGPAAct.

AustralianPostalCorporationAct1989

01Jul

1989

AustralianRailTrack

CorporationLimited

Infrastructure,

Regional

Developmentand

Cities

Commonwealth

Company

TheAustralianRailTrackCorporationLimited(ARTC)wascreated

aftertheCommonwealthandStateGovernmentsagreedin1997to

theformationofa'one-stopshop"forallrailoperatorsseeking

accesstotheNationalinterstaterailnetwork.ARTCcurrentlyhas

responsibilityforthemanagementofover8,500routekilometresof

standardgaugeinterstatetrackinSouthAustralia,Victoria,Western

Australia,QueenslandandNewSouthWales.

ARTCalsomanagestheHunterValleycoalrailnetwork,andarange

ofregionalraillinks,invariousstatejurisdictions.Overthese

corridors,ARTCisresponsiblefor:

-sellingaccesstotrainoperators;

-thedevelopmentofnewbusiness;

-capitalinvestmentinthecorridors;

-managementofthenetwork;and

-themanagementofinfrastructuremaintenance

Commonwealthcompanyunderthe

CorporationsAct25Feb

1998

AustralianSports

Commission

Health Corporate

Commonwealth

Entity

TheAustralianSportsCommission(ASC)isAustralia'sprimary

nationalsportsadministrationandadvisoryagency.TheASCis

focusedongettingmoreAustraliansparticipatingandexcellingin

sportby:

-deliveringkeyprogramsinlinewiththeAustralianGovernment's

sportpolicyobjectives;

-providingfinancialsupportandotherassistancetonational

sportingorganisationstoencourageparticipation,deliverhigh

performanceresults,andimprovetheircapability,sustainabilityand

effectiveness;and

-buildingcollaboration,alignment,andeffectivenesswithinthe

Australiansportsector.

TheASCisrecognisedasaworldleaderinencouragingparticipation

AustralianSportsCommissionAct1989

01Jun

1985

PAGE 26

insport,andthedevelopmentofhighperformancesportspeople.

Servicesareprovidedinarangeoffieldsincluding:

-highperformancecoaching;

-sportsciences;

-sportsinformation;

-sportsmanagement;

-facilitymanagement;

-educationandresources;

-participationdevelopment;and

-deliveryoffundingprogramstonationalsportingorganisations.

TheASCisgovernedbyaboardofcommissionersappointedbythe

AustralianGovernment.TheboarddeterminestheASC'soverall

direction,decidesontheactualallocationofresources,develops

policyfordelegateddecisions,andisaccountabletotheMinisterof

SportandtoParliament.

CleanEnergy

FinanceCorporation

Environmentand

Energy

Corporate

Commonwealth

Entity

TheCleanEnergyFinanceCorporation(CEFC)mobilisescapital

investmentinrenewableenergy,low-emissiontechnologyand

energyefficiencyprojectsinAustralia.

CleanEnergyFinanceCorporationAct2012

03Aug

2012

Comcare JobsandSmall

Business

Corporate

Commonwealth

Entity

Comcarepartnerswithworkers,theiremployersandunionstokeep

workershealthyandsafe,andreducetheincidenceandcostof

workplaceinjuryanddisease.ComcareimplementstheAustralian

Government'spoliciesinfederalworkplacestodrivesocialinclusion

andproductivity.ThethreeoutcomesthatguideComcareare:

-theprotectionofthehealth,safetyandwelfareatworkofworkers

coveredbytheComcareschemethrougheducation,assuranceand

enforcement;

-anearlyandsafereturntoworkandaccesstocompensationfor

injuredworkerscoveredbytheComcareschemebyworkingin

partnershipwithemployerstocreatebestpracticeinrehabilitation

andbyprovidingquickandaccuratemanagementofworkers'

compensationclaims;and

-accesstocompensationforpeoplewithasbestos-relateddiseases

wheretheCommonwealthhasaliability.

InadditiontotheaboveoutcomesComcarealsosupportsthe

SeacareAuthorityinthedeliveryofitsstatutoryfunctions.

Safety,RehabilitationandCompensationAct1988

22Jun

1992

PAGE 27

Commonwealth

Superannuation

Corporation

Finance Corporate

Commonwealth

Entity

TheCommonwealthSuperannuationCorporation(CSC)provides

superannuationservicesandproductstoAustralianGovernment

employees,employersandAustralianDefenceForcemembersand

theirfamilies.

CSCistrusteeoffiveregulatedsuperannuationschemes:

-CommonwealthSuperannuationScheme(CSS)

-PublicSectorSuperannuationScheme(PSS)

-PublicSectorSuperannuationaccumulationplan(PSSap)

(CommonwealthSuperannuationCorporationretirementincome

(CSCri)isavailablethroughthePSSap)

-AustralianDefenceForceSuperannuationScheme(ADFSuper),and

-MilitarySuperannuationandBeneftsScheme(MilitarySuper)

CSCadministerssixexemptpublicsectorschemesthatarenot

regulatedundertheSuperannuationIndustry(Supervision)Act1993:-theAustralianDefenceForceCoverScheme(ADFCover);

-DefenceForceRetirementandDeathBenefits(DFRDB)Scheme;

-1922Scheme;

-theDefenceForcesRetirementBenefits(DFRB)Scheme;

-PapuaNewGuinea(PNG)Scheme,and

-theDefenceForce(Superannuation)(ProductivityBenefit)

Determination(DFSPB).

CSCissupportedbyanadministratorforitsaccumulationplans,a

custodianandotherspecialistserviceproviders,includingleading

Australianandinternationalinvestmentmanagers.

GovernanceofAustralianGovernmentSuperannuationSchemesAct2011

01Jul

2011

CottonResearch

andDevelopment

Corporation

Agricultureand

WaterResources

Corporate

Commonwealth

Entity

TheCottonResearchandDevelopmentCorporation(CRDC)was

establishedbytheAustralianGovernmenttoworkwithindustryto

investinresearch,developmentandextension(RD&E)foramore

profitable,sustainableanddynamiccottonindustry.CRDCisbased

inNarrabri,thecentreofoneofAustralia'smajorcottongrowing

regionsandthelocationofthemajorcottonresearchfacility,the

AustralianCottonResearchInstitute.ThepurposeoftheCRDCisto

supporttheperformanceofthecottonindustry:helpingtoincrease

bothproductivityandprofitabilityofourgrowers.

PrimaryIndustriesResearchandDevelopmentAct1989

01Oct

1990

DefenceHousing

Australia

Defence Corporate

Commonwealth

Entity

DefenceHousingAustralia(DHA)provideshousingformembersof

theAustralianDefenceForceandtheirfamilies.Formerlyknownas

theDefenceHousingAuthority(renamedin2006),DHAreportsto

theMinisterforDefenceandtheMinisterforFinance.DHAis

DefenceHousingAustraliaAct1987 01Jan

1988

PAGE 28

prescribedasaGovernmentBusinessEnterpriseunderregulation4

oftheCommonwealthAuthoritiesandCompaniesRegulations1997.DirectorofNational

Parks

Environmentand

Energy

Corporate

Commonwealth

Entity

TheDirectorofNationalParksisacorporationestablishedunderthe

EnvironmentProtectionandBiodiversityConservationAct1999(EPBCAct),theprincipalCommonwealthlegislationforestablishing

andmanagingprotectedareas.Thecorporationisconstitutedbythe

personappointedtotheofficenamedtheDirectorofNationalParks.

UndertheEPBCAct,theDirectorofNationalParks'responsibilitiesinclude:

-managingCommonwealthreservesandconservationzones;

-protectingbiodiversityandheritageinCommonwealthreserves

andconservationzones;

-carryingoutresearchrelevanttoCommonwealthreserves;

-cooperatingwithothercountriestoestablishandmanagenational

parksandnaturereservesinthosecountries;and

-makingrecommendationstotheAustralianGovernmentMinister

fortheEnvironment.

CommonwealthreservesthatarewhollyorpartlyonIndigenous

people'slandaremanagedinconjunctionwithaBoardof

Management.TherearealsoAdvisoryCommitteeswhichprovide

advicetotheDirectoronthemanagementofotherreserves.These

boardsandcommitteesplaycrucialrolesindeterminingthepolicies

andprioritiesforthemanagementofeachprotectedarea.

EnvironmentProtectionandConservationAct1999

13Mar

1975

GrainsResearchand

Development

Corporation

Agricultureand

WaterResources

Corporate

Commonwealth

Entity

TheGrainsResearchandDevelopmentCorporation(GRDC)isoneof

theworld'sleadinggrainsresearchorganisations,responsiblefor

planning,investinginandoverseeingresearchdevelopmentand

extensiontodeliverimprovementsinproduction,sustainabilityand

profitabilityacrosstheAustraliangrainsindustry.

GRDCisastatutorycorporation,establishedin1990underthe

PrimaryIndustriesResearchandDevelopmentAct1989.GRDC'sprimaryobjectiveistodrivethediscovery,developmentanddelivery

ofworld-classinnovationtoenhancetheproductivity,profitability

andsustainabilityofAustraliangraingrowersandbenefitthe

industryandthewidercommunity.

GRDCcoordinatesandfundsresearchanddevelopment(R&D)

activities,andmonitors,evaluatesandreportsontheimpactofR&D

PrimaryIndustriesResearchandDevelopmentAct1989

01Oct

1990

PAGE 29

activitiesonthegrainsindustryandthewidercommunity.GRDCalso

facilitatesthedissemination,adoptionandcommercialisationofthe

resultsofR&D.

Infrastructure

Australia

Infrastructure,

Regional

Developmentand

Cities

Corporate

Commonwealth

Entity

On1September2014,amendmentstotheInfrastructureAustraliaAct2008cameintoeffect.Theamendmentsre-established

InfrastructureAustralia(IA)asaseparateentityunderthePGPAAct,andprovidedforanindependentgoverningentitythatisbothlegally

andfinanciallyseparatefromtheCommonwealth,includinganew

Board.

TheamendmentsspecificallycreatedaChiefExecutiveOfficer(CEO)

positionthatreportstoanewlycreatedBoard,effectivelyabolishing

theexistingInfrastructureCoordinatorroleandtheIACouncil.In

accordancewithotherGovernmentboards,theCEOpositionwillbe

responsibleforimplementingtheBoard'sstrategicobjectives.It

requiresIAto:

-developa15yearinfrastructureplanforAustraliabasedon

national,stateandlocalinfrastructureprioritiesandrevisedevery

fiveyears;

-undertakenewevidence-basedauditofAustralia'scurrent

infrastructureassetbase,incollaborationwithStateandTerritory

Governmentsthatwillbeupdatedeveryfiveyearsandfedintothe

15yearplan;

-developtopdownprioritylistsatnationalandstatelevels;

-evaluatebotheconomicandsocialinfrastructureproposalsand

publishthejustificationforprioritisation,includingbenefitcosts

analysis;

-provideaquarterlypublicationsummarisingallprojectproposals

evaluated;and

-promotepublicawarenessofmattersarisingfromitsfunctions.

InfrastructureAustraliaAct2008,part2

01Sep

2014

Moorebank

Intermodal

CompanyLimited

Infrastructure,

Regional

Developmentand

Cities

Commonwealth

Company

TheMoorebankIntermodalCompanyLimited(MIC)wasestablished

tofacilitatethedevelopmentofanintermodalterminalat

MoorebankinSydney'ssouth-west.MICisaGovernmentBusiness

Enterprise(GBE),whichisincorporatedundertheCorporationsAct,andoperatesunderthePGPAAct.MICiswhollyownedbythe

AustralianGovernment,whichisrepresentedbytheMinisterfor

InfrastructureandTransportandtheMinisterforFinanceasMIC's

twoShareholderMinisters.

MICwilloverseethedevelopmentoftheMoorebankIntermodal

Commonwealthcompanyunderthe

CorporationsAct13Dec

2012

PAGE 30

Terminal.MICaimstooptimiseprivatesectorexpertiseand

investment,throughacompetitiveprocess,todevelopandoperate

theintermodalterminalandmeettheproject'sobjectives.

MIC'sobjectivesfortheprojectareto:

-boostnationalproductivityoverthelong-termthroughimproved

freightnetworkcapacityandrailutilisation;

-createaflexibleandcommerciallyviablecommonuserfacilityfor

railoperatorsandotherterminalusers;

-attractemploymentandinvestmenttosouth-westernSydney

-achievesoundenvironmentalandsocialoutcomesthatare

considerateofcommunityviews;and

-optimisevalueformoneyforMIChavingregardtotheotherstated

projectobjectives.

Murray-Darling

BasinAuthority

Agricultureand

WaterResources

Corporate

Commonwealth

Entity

TheMurray-DarlingBasinisAustralia'smosticonicandlargestriver

system.Itisalsooneofthelargestriversystemsintheworldand

oneofthedriest.ItisdividedintothenorthernBasin(Darling

system)andthesouthernBasin(Murraysystem).TheMurray-

DarlingBasinAuthority(MDBA)undertakesactivitiesthatsupport

thesustainableandintegratedmanagementofthewaterresources

oftheMurray-DarlingBasininawaythatbestmeetsthesocial,

economicandenvironmentalneedsoftheBasinandits

communities.

MDBAleadstheplanningandmanagementofBasinwater

resources,andcoordinateandmaintaincollaborativelong-term

strategicrelationswithotherAustralianGovernment,Basinstate

governmentandlocalagencies;industrygroups;scientistsand

researchorganisations.TheWaterAct2007requiresMDBAto

undertakeanumberoffunctions:

-advisetheCommonwealthMinisterforWaterontheaccreditation

ofstatewaterresourceplans;

-developawaterrightsinformationservicetofacilitatewater

tradingacrosstheBasin;

-managewatersharingbetweenthestates;

-manageallaspectsofBasinwaterresources,includingwater,

organismsandothercomponentsandecosystemsthatcontributeto

thephysicalstateandenvironmentalvalueoftheBasin'swater

resources;

-measureandmonitorwaterresourcesintheBasin;

WaterAct2007,section171 03Mar

2008

PAGE 31

-gatherinformationandundertakeresearch;and

-engageandeducatethecommunityinthemanagementofthe

Basin'sresources.

NBNCoLimited Communications

andtheArts

Commonwealth

Company

"NBNCoLimited(NBNCo)isawholly-ownedCommonwealth

company-aGovernmentBusinessEnterprise-andisrepresentedby

ShareholderMinisters-theMinisterforCommunicationsandthe

MinisterofFinance.

TheNBNCogoalsaretodeliverAustralia'sfirstnationalwholesale-

only,openaccessbroadbandnetworktoallAustralians."

NationalBroadbandNetworkCompaniesAct2011

09Apr

2009

NationalHousing

Financeand

Investment

Corporation

Treasury Corporate

Commonwealth

Entity

TheNationalHousingFinanceandInvestmentCorporation(NHFIC)'s

missionistoimprovehousingoutcomesforallAustralianby:

-strengtheningeffortstoincreasethesupplyofhousing;

-encouraginginvestmentinhousing(particularlyintheaffordable

housingsector);

-providingloans,grantsandinvestmentsthatcomplement,leverage

orsupportCommonwealth,stateorterritoryactivitiesrelatingto

housing,and

-contributingtothedevelopmentofthescale,efficiencyand

effectivenessofthecommunityhousingsector.

TheNHFIChastwooperations:

-makingloans,investmentsandgrantsforenablinginfrastructure

forhousingthatsupportsnewhousing,particularlyaffordable

housingthroughthe$1billionNationalHousingInfrastructure

Facility;and

-providingcheaperandlonger-termfinancingtoregistered

communityhousingprovidersthroughAustralia'sfirstnational

AffordableHousingBondAggregator.

NationalHousingFinanceandInvestmentCorporationAct2018

30Jun

2018

NationalTransport

Commission

Infrastructure,

Regional

Developmentand

Cities

Corporate

Commonwealth

Entity

TheNTCperformstheroleofanexpertadvisertotheTransportand

InfrastructureCouncilonnationalregulatoryreformdevelopment,

implementationandevaluationintheAustralianlandtransport

sector,principallyinrespectofthenationalregulatorsforheavy

vehiclesandrailsafety.

TheCouncil,aministerialcouncilformedbytheCouncilofAustralian

Governments,isresponsiblefortheNTC,asaninter-jurisdictional

transportbodycoveredbyanIntergovernmentalAgreement(IGA).

TheCommonwealthisthehostjurisdictionfortheNTC.

NationalTransportCommissionAct2003,section5pursuanttotheIntergovernmentalAgreementfor

RegulatoryandOperationalReform

inRoad,RailandIntermodal

Transport2003

15Jan

2004

PAGE 32

NorthernAustralia

Infrastructure

Facility

Industry,Innovation

andScience

Corporate

Commonwealth

Entity

TheNorthernAustraliaInfrastructureFacility(NAIF)offersupto$5

billionover5yearsinconcessionalfinancetoencourageand

complementprivatesectorinvestmentininfrastructurethatbenefits

NorthernAustralia.Thismayincludedevelopmentsinairports,

communications,energy,ports,railandwater.

NorthernAustraliaInfrastructureFacilityAct2016

01Jul

2016

RegionalInvestment

Corporation

Agricultureand

WaterResources

Corporate

Commonwealth

Entity

TheRegionalInvestmentCorporation(RIC)willbethenational

administratorforfarmbusinessconcessionalloansandtheNational

WaterInfrastructureLoanFacility.TheRICwillcommencedelivering

itsfunctionsfrom1July2018.TheRICwasestablishedandis

governedbytheRegionalInvestmentCorporationAct2018,andisacorporateCommonwealthentitywithintheAgricultureandWater

Resourcesportfolio.

RegionalInvestmentCorporationAct2018

08Mar

2018

SydneyHarbour

FederationTrust

Environmentand

Energy

Corporate

Commonwealth

Entity

TheSydneyHarbourFederationTrustisanagencycreatedbythe

AustralianGovernmentresponsibleforvisionplanningand

managementofSydneyHarboursitesincludingCockatooIslandand

SnapperIslandinSydneyHarbour,WoolwichDockandParklandsin

Woolwich,HMASPlatypusinNeutralBay,GeorgesHeights,Middle

HeadandChowderBayinMosman,NorthHeadSanctuaryinManly,

MarineBiologicalStationinWatsonsBayandMacquarieLightstation

inVaucluse.TheHarbourTrust'svisionistocreateextraordinary

placesontheworld'sbestharbourthatareinspiring,lovedand

shared.TheHarbourTrustprovidesalastinglegacyforallAustralians

throughconservation,remediationandtheadaptivere-useofplaces

inourcare.Thesepublicspacesandparklandsnowoffermajor

events,exhibitions,venuehire,accommodation,toursandbusiness

tenancy.

SydneyHarbourFederationTrustAct2001

20Sep

2001

TourismAustralia ForeignAffairsand

Trade

Corporate

Commonwealth

Entity

TourismAustraliaistheAustralianGovernmentagencyresponsible

forthepromotionofAustraliaasadestinationforleisureand

businesstourism,includingforbusinessevents.TourismAustralia's

marketing,tradeandconsumerresearchprogramsarefocusedon

17keyinternationalmarketswiththegreatestpotentialtodeliveron

theTourism2020policyobjectivetoincreaseovernightvisitor

expendituretobetween$115billionand$140billionby2020.

TourismAustraliaAct2004 01Jul

2004

WSACoLimited Infrastructure,

Regional

Developmentand

Cities

Commonwealth

Company

WSACowasestablishedbytheAustralianGovernmenttodevelop

andoperateWesternSydneyAirport(WSA)atBadgery'sCreek.WSA

Coisrequiredtoexecuteitsresponsibilitiesinaccordancewitha

ProjectDeedwiththeGovernmentinordertoopentheWSAby

2026.

Commonwealthcompanyunderthe

CorporationsAct07Aug

2017

PAGE 33

IndeliveringtheWSA,WSACo'sobjectivesareto:

-improveaccesstoaviationservicesinWesternSydney;

-resolvethelong-termaviationcapacityissueintheSydneybasin;

-maximisethevalueofaWSAasanationalasset;

-optimisethebenefitsofWSAforemploymentandinvestmentin

WesternSydney;

-effectivelyintegratewithnewandexistinginitiativesinthe

WesternSydneyarea;and

-operateoncommerciallysoundprinciples.

PAGE 34